Week 8 - Global Systems, Trade and Markets, Case Study.

Impacts of unequal flows of people

• Can create under/overpopulation in place of origin/receiving.

• Strain on public services.

• Social tensions.

• Economic disparities.

• Brain drain in countries with lots of people leaving.

• Exploitation of migrant labour in receiving communities.

Impacts of unequal flows of money

• This can create increased global inequality, where wealth concentrates in particular regions/countries, often leading to poverty traps in developing Nations, limited access to services, social tensions, and environmental degradation due to exploitative practices by TNCs in the areas.

• Managed inequality in money flows can be good for developing nations receiving aid.

Impacts of unequal flows of ideas

• Increased influence of dominant cultures.

• Hindered innovation in less developed nations.

• Lack of diverse perspectives.

• Cultural homogenisation.

• Perpetuate existing inequalities.

Impacts of unequal flows of technology

• Lack of access to certain industries.

• Lack of global communication.

• Widening economic disparities between developed and developing nations.

• Access to tech gives advanced production of manufactured goods and hence wealth.

Unequal power relations

A lot of global systems favour powerful, developed nations. This means that some developing nations will not see the benefits of these systems, and they only work to widen the development gap.

Comparative Advantage in Trade

Countries specialise in providing goods and services that they excel in producing. The idea then goes that production should increase in each country and globally because each country is concentrating on its specialism.​

Tariff

A tax imposed on an imported good.

Protectionism

A method governments use of imposing tariffs to try and protect their national industries from cheaper imports. Thus, keeping jobs and businesses in their country​.

Free-trade agreements

• EU – European Union​

• USMCA agreement (surplants NAFTA - North American Free Trade Agreement in July 2020)​

• UNASUR – Union of South American Nations​

• ASEAN – Association of Southeast Asian Nations​

• AU – African Union​

Malawi - Background/Challenges

Background

• Very low HDI.

• Rapidly growing pop.

• Only 35% of kids complete primary.

  Challenges

• Relies heavily on agriculture - over-farming strips soil of its nutrients and increases soil erosion.

• Climate change - farmers are seeing less rainfall and longer heatwaves = crop failures.

• Physical Isolation - Landlocked. Hard for farmers to export produce.

• Mountainous - hard to build infrastructure. This often leaves with rural areas with poor access and communications.

• 85% of people live in rural areas. Combined with poor access this makes economic development hard.

Malawi - Trade/Globalisation

Trade/Globalisation

• Exports most of its goods (tobacco, tea, coffee) to Europe but faces tariffs and regulations.

• They export their low-value unprocessed goods to avoid tariffs. This limits their profit.

• Globalisation isn’t always fair.

Bananas

• Bananas are the 4th most important food product within LDCS, being a staple food for 400 million people. ​

• Of all fruits, bananas are the most internationally traded, generating revenues of over $15 billion/year.​

Bananas - Producers and Consumers

• ACP group (Africa, Caribbean, Pacific) and the ‘dollar-producers’ (Ecuador and Colombia)- all controlled by TNCS (such as Del Monte, Chiquita)- the big TNCs control 80% of the market​

• Bananas are produced in over 135 countries and territories across the tropics and subtropics. India ranks number one with 29.7 million tonnes per year, followed by Uganda (11.1 million tonnes per year) and China (10.7 million tonnes per year)​

• Other leading producers are Costa Rica, Ecuador, Colombia (13 million tonnes)​

• Largest importers are EU and USA (each consuming 27% of total). ​

• Around 90% of price paid stays in the import country

Three problems for Bananas

• Trade wars (1992-2009)​

• Race to the bottom​

• Disease​